Thursday, July 24

Malaysia's annual inflation rate spiraled to a 27-year high in June after a fuel price hike sent the cost of food and transport soaring, the government said.

Consumer prices in June rose 7.7 percent compared with the same month in 2007, more than double the 3.8 percent annual inflation rate recorded in May, according to data released late Wednesday by the Statistics Department.

"The main reason for this increase is due to the substantial rise in the price of petrol and diesel announced by the government," the statistics department said.

The inflation figures underscore growing public frustrations over the higher cost of living after the government raised gasoline prices by 41 percent and diesel prices by 63 percent in early June to curb a runaway subsidy bill.

Shahrir said annual inflation would likely remain above 7 percent in July because the government raised electricity tariffs by 18 percent for households and an average of 26 percent for commercial and industry users.

The government has said inflation may cross 5 percent in 2008, but it has pledged not to further raise fuel prices this year. Inflation was around 2 percent last year.

As a Malaysian, I also feel the impact of the rising cost of living, and of the inflation. Everything costs more now, then it was a few years back. I blame it on the recent fuel price hike. The 40% fuel hike is by far the highest ever made by Malaysia Government.

I hope the Government will implement ways to softened the impact of the fuel hike, and find ways to better manage the public funds.